Nothing is more common in moral debates than to invoke the names of great thinkers from the past. Business ethics is no exception. Yet insofar as business ethicists have tended to simply mine abstract formulas from the past, they have missed out on the potential intellectual gains in meticulously exploring the philosophic tradition. This paper seeks to rectify this shortcoming by advocating a close reading of the so-called “great books,” beginning the process by focusing on Aristotle. The Nichomachean Ethics and (...) The Politics points to Aristotle’s emphasis on tying business morality to a universal conception of the good life. This conception defines personal happiness to chiefly consist in practicing the virtues, a life in which both desire and the pursuit of wealth is kept under check. According to Aristotle, virtue reaches its height with the exercise of the intellectual virtues of prudence and wisdom – the first manifest in the leadership of organizations, and the second in the philosophic search for truth. From an Aristotelian point of view, therefore, the greatest ethical imperative for business is to give individuals opportunities to thoughtfully participate in the management of company affairs and to contemplate the ultimate meaning of things. (shrink)

When a series of corporate scandals erupted soon after the collapse of the 1990s bull market in equities, policy makers and reformers chiefly responded by augmenting and refining the checks and balances surrounding publicly traded corporations. Through measures such as the Sarbanes-Oxley Act of 2002, securities regulations were intensified and corporate governance was tightened. In essence, reformers followed the tradition of modern political philosophy, developed in the 17th and 18th centuries, in its insistence that pro-social outcomes are best produced through (...) institutional mechanisms that harness self-interest. The empirical evidence, however, suggests the institutional approach will do little to prevent future ethical breakdowns. To corroborate this finding, we survey the literature on board composition, auditor consulting practices, shareholder activism, and executive compensation. Consequently, we look to another stream of political philosophy, the ancient tradition comprising Plato and Aristotle, which argues that social groupings, such as corporations, work best when led by individuals of good character. Applying the ancient view to modern commercial realities, the paper concludes that Benjamin Franklin's attempt to connect virtuous character with enlightened self-interest offers a compelling ethic for corporate leaders. (shrink)

Smith's famous invocation of the invisible hand -according to which self-interest promotes the greater good — has popularly been seen as a fundamental challenge to business ethics, a field committed to the opposite premise that the public interest cannot be advanced unless economic egoism is restrained by a more socially conscious mindset, one that takes into account the legitimate needs of stakeholders and the reciprocity inherent in networked relationships. Adam Smith has been brought into the discipline to show that his (...) authority cannot be summoned to fully support the free market sceptics of business ethics. Little has been done, however, to illustrate that Smith's moral writings actually contain the fundamentals of a business ethics teaching for managers who necessarily work within a variety of networks. This article analyses his moral thought to infer a Smithean framework of business ethics for managers. Smith believes that self-interest should be subordinated to moral imperatives, even in the business world. However, Smith rejects the principles of corporate social responsibility on the argument that benevolent impulses cannot be expected to prevail in the commercial arena. Instead of consciously trying to advance the social good, Smith's ideal manager will endeavour to personally live up to the standards enforced by an impartial spectator of his conduct, a theoretical entity reflecting the ethical requirements posed by the manager's social networks and stakeholder relationships. While this internalized onlooker expects a limited degree of benevolence, the overriding demand is for the manager to abide by the dictums of justice and prudence. (shrink)

Recent corporate scandals raise an old question anew: is capitalism fundamentally infected by immorality? A now almost forgotten answer to this question was advanced at the dawn of capitalism, an answer that students of business ethics would find profit in considering. In the early eighteenth century, Bernard Mandeville authored The Fable of the Bees, which became notorious in its day for arguing that capitalism created wealth while necessarily relying on vicious impulses. The fundamental dilemma is that morality requires self-denial while (...) capitalism runs on self-interest. As such, Mandeville claims that business and ethics are essentially separate.While this would appear to align him with skeptics of business ethics, Mandeville does suggest a role for moral theorists in dealing with the challenges of commercial societies. The Mandevillean business ethicist proceeds by separating the public and private spheres. In the former, where government policy toward business is at issue, the Mandevillean ethicist applies a market-friendly utilitarianism. In the latter, where individual conduct is at issue, the Mandevillean gently articulates a market-critical ethic predicated on self-restraint. (shrink)

It is a common lament that people, the young especially, are increasingly shyingaway from books and instead turning for intellectual sustenance to video games, film, andtelevision - that is, images are displacing words, with the result that the culture isbecoming less tolerant of cognitive complexity .1Instead of vainly tryingto reform, or negate the influence of, popular entertainments, it might be better toembrace them, making selective use of them to cultivate an interest in philosophic topicsamong young minds. Perhaps we can lead (...) them to the words of the great philosophic textsby showing them how some of the actions and dialogues portrayed in the images theyavidly consume exemplify and explore themes, concepts, and arguments otherwise dealtwith by the likes of Plato, Descartes, and Hume. Guided by this pedagogical hope, thispaper aims to plumb the philosophic significance of Memento. (shrink)

The quest to foretell the future is omnipresent in human affairs. A potential solution to this epistemological conundrum has emerged through mass collaboration. Motored by the Internet, prediction markets allow a multitude of individuals to assume a stake in a security whose value is tied to a future event. The resulting prices offer a continuously updated probability estimate of the event actually taking place. This paper gives a survey of prediction markets, their history, mechanics, uses, and theoretical foundation. We also (...) review the literature surrounding their efficacy. Though there are shortcomings with prediction markets, as well as practical constraints, they hold out the prospect of improving the quality of organizational decisions and increasing the level of participation in the deliberative process. We also note that lessons can be drawn from these markets to guide the epistemological practices of disciplines and inquiries in which empirical methods are difficult to apply. (shrink)

This article attempts to uncover the relevance of Cicero’s thought to present-day management through an analysis of his last philosophical study, On Duties. Applying a methodology grounded in Socratic skepticism, Cicero synthesizes the Stoics and Aristotle to create his own moral theory. From this theory, we derive a Ciceronian set of recommended traits that make up a model business leader. Central to this model is the recognition that there are two lodestars in life, the beneficial and the honorable. The first (...) directs each of us to attend to our personal happiness, and the second to our moral worth. In Cicero’s view, the life of leading sizable associations is what best satisfies this dual imperative. The honor of a business leader is secured by the practice of four virtues: wisdom, justice, greatness of spirit, and seemliness. A leader properly seeks his/her own benefit by recognizing that success comes from the relationships he/she establishes and that he/she are more apt to cultivate these by being virtuous. Cicero is not so naïve as to fail to see that the beneficial and the honorable may come into tension, noting various examples from business to illustrate the dilemma. But he insists a businessperson can be ethical and prosper at the same time once he/she comprehends the social fellowship of humanity. (shrink)

Socrates is said to have brought philosophy down from the heavens to the earth and is thereby recognized as the founder of Western moral and political philosophy. But in launching this subject, did the 5th century BC Greek philosopher also inaugurate the study of management and business ethics? Our answer is yes. Socrates' inquiry into management, featured in Xenophon's Oeconomicus, contains valuable insights still relevant to the contemporary world. In that foundational work of Western economic thought, Socrates is portrayed attempting (...) to expound the science and art of management to an eager student. He develops this topic, in no small part, by actively seeking out a successful practitioner, engaging him in conversation and probing him with questions. The Socratic perspective brought to light holds that business cannot be separated from social responsibility and ought to be oriented around a conception of profit that goes beyond monetary figures and embraces the satisfaction of rationally grounded human wants. Socrates also insists that management is a respectable calling which both men and women can legitimately pursue. A good manager, too, is defined by a functionally relevant set of virtues with a view to personal flourishing and moral excellence. Ethical conduct comes to sight as a core component of management. (shrink)

The aim of this thesis is two-fold: first and foremost, it is to explore an empirical approach to the problem of identifying a framework that objectively distinguishes virtue from vice, the moral from the immoral; second, it seeks to apply the results of this effort, a science of morality that is, to uncover which social, economic, religious, and political institutions best satisfy our ethical obligations. In pursuing this aim, we take David Hume, the 18th century Scottish philosopher, as our guide. (...) His inquiries into the science of morality, and his application of it, are what we explore. The thesis begins by pointing out a science of morals must answer two questions: how do we differentiate between virtue and vice--is it by reason or feeling? What do we determine as virtuous and vicious? In Chapter 1, we show how Hume claims feeling, or sentiment, is the basis of moral evaluations. Chapters 2 and 3 discuss Hume's theory that sentiments distinguish what is agreeable and useful, both personally and socially, as virtuous. Chapter 4 takes up Hume's answer to the question left dangling in the first three chapters: why should reason not be the one that establishes morality? At this point, Hume's renowned scepticism emerges as a threat to the viability of a science of morality, a threat dealt within Chapter 5. From there, the thesis takes a more political turn, as we consider Hume's views on justice from Chapters 6 to 8. Justice is seen to be solely a matter of social utility, a utility maximized in prevailing historical conditions, by a wealth-creating economic order. The thesis finishes by explaining Hume's support for democracy as well as his call for a secular culture committed to the flourishing of the arts and sciences. ;In the end, Hume's science of morality supports a society pretty much like our own and thereby teaches us to respect and cherish our institutions. (shrink)

Since the financial crisis first erupted in the summer of 2007, the US Federal Reserve has sought to contain negative spillovers into the real economy by dramatically loosening monetary policy. Initially, this was done by lowering its key lending rates, but as the crisis has worsened, and rates have approached closer to zero, it has resorted to expanding its balance sheet in a historically unprecedented fashion. The Fed’s total assets have more than doubled to nearly $2 trillion since the summer (...) of 2007.Much of the debate surrounding the wisdom of this extraordinary increase in the production of money has revolved around its expediency–in other words, will it actually work to rescue the economy? Very little has been said, at least explicitly, about whether it is the morally right thing to do.This paper seeks to fill this gap by providing a moral analysis of the Fed’s response to the financial crisis. For this purpose, we apply Aristotelian virtue theory, Lockean natural rights philosophy, Kantian deontology, and Benthamite utilitarianism. The idea is that if a consensus, or a strong majority, can be reached from differing philosophic assumptions and starting points, then the resulting judgment ought to be compelling for all neutral observers. On the basis that the Fed’s efforts are likely to result in a marked rise in inflation, we argue that every one of these four moral theories ultimately renders a negative judgment. As such, we conclude that the Fed is pursuing an immoral course. (shrink)

No political philosopher is better known in the business world than Niccolo Machiavelli, whose fame there rests entirely on his authoring of The Prince. Over the last two decades, no less than ten books have been published in the popular business press on the Renaissance Italian thinker, most of them attempting to show the relevance of his realpolitik world-view to the sorts of issues that a contemporary manager is apt to face. The popular view, though, of Machiavelli as a hard-headed (...) thinker has been challenged by scholars pointing to his advocacy of republics in the Discourses on Livy, his other great work. Interpreted along these lines, Machiavelli can be invoked to support participatory structures in business along with the cultivation of publicly spirited virtues. We argue that the common perceptions of Machiavelli are on the right track. His analysis of republics uncovers weaknesses germane to business that render The Prince more suitable to commercial life. As such, Machiavelli's overriding point is that in a competitive arena, like that of modern-day business, individuals holding leadership positions, or aspiring to them, must be prepared to go beyond conventional morality and live by a different and, indeed, icy set of rules. Being good in business, Machiavelli warns, will only lead to personal ruin. Machiavelli goes further than this, calling for a trans-valuation of values, wherein the praiseworthy qualities of leaders are redefined so as to take into account the competitive realities of business. In this new ethic, virtue is connected to acquisitiveness, moral flexibility, image management, reaching its culmination in the entrepreneurial task of founding a great company. (shrink)